Types of Surety bonds
- Title Bonds
- Sales Tax
- DMEPOS (medicare)
- License & Permit
- Public Official
- Probate and Other Court Bonds
- Miscellaneous Surety Bonds
- Contract Performance Bonds
- Dealer Bonds
License & Permit
License bonds guarantee the Principal will comply with applicable codes and regulations established by the Obligee. (The Obligee is usually a government entity such as a City, Town, or State.)
Permit bonds grant a Privilege.
- Electrician’s license
- Plumber’s license
- General Contractor’s license
- Driveway permit
- Sign permit
- Sales tax
Example: Electrical contractors may be required to post a surety as part of their licensing requirements. The obligation of it may specify that the contractor will follow the electrical codes established in that city, town, or municipality.
The requirements and ordinance must be understood before is written. The agent may ask you to obtain a copy of the ordinance or law that specifies the requirements and a copy of the bond, if the Obligee has its own.
Depending upon the type of obligation, supporting documentation such as signatures, financial statements, and other supplemental information may be required.
A Public Official guarantees that elected or appointed officials will faithfully perform their duties. The amount as well as duties are usually specified by statute or ordinance.
- Tax Collectors
- Peace Officers
- Hunting & Fishing license agents
It should be noted that not all public entities require Public Officials to be bonded.
Underwriting aspects of Public official bonds include understanding the duties required of the Official, the reputation (character) of the official, and experience of the official.
Probate & Other Court
A Probate guarantees an honest accounting and faithful performance of duties by fiduciaries/trustees. These bonds are required by courts or statutes as estates of deceased persons, incompetent persons, and minors are set up and administered. (For the estates)
A Bankruptcy or Equity bond might be required of an appointed fiduciary for the sale of real estate or for notarizations property in foreclosure, reorganization or other litigation. This bond guarantees an honest accounting and performance of duties while managing and distributing the assets as directed by the court.
Common types include Receivers and Trustees.
Other Judicial bonds may be required by a court in cases where someone is seeking legal benefit or relief. These court bonds can be extremely hazardous. Specific supplemental information may be required.
- Attachment bonds
- Release of lien.
Miscellaneous surety bonds include those that do not fit into any of the other surety categories. These are usually more hazardous obligations.
- Utility payment guarantees
- Lost Security/Lost Instruments (cashier’s check, stock certificates, and municipal bonds)
- Union Wage & Welfare.
Miscellaneous surety bonds require more extensive underwriting because the guarantee to the obligee is monetary. In addition to the application, supporting information such as signatures, financial statements, and other supplemental forms are usually required.
Contract Performance Bond